Expanding Your Geographical Reach
Branching out into new markets has clear advantages, but it also has its caveats--namely cost, consistency, and culture.
By Carolyn Heinze
As everyone remains hunkered down to ride out the final waves of the economic crisis, it might seem strange to discuss expansion. But life goes on even in tough times, and the reality is that SMBs continue to require the valuable services that MSPs offer. "The market still needs IT services," says John Kilian, president of AntFarm Inc., a service performance consultancy in Alpharetta, Ga. "Companies that are willing to more aggressively go out and address that are the ones getting that market share."
There are a number of advantages to branching out, chief among them is that it can significantly add to the value of your organization. Branching out also enables companies to use many of the back-office systems they've established at home by scaling them to remote locations.
"The reason you want that geography is that you think you can scale faster by duplicating it. You think you can maximize your home market and grow the second market so you can increase sales faster," says Gary Pica, president and CEO of TruMethods, a Moorestown, N.J-based consultancy that offers live Web classes and a starter kit instructing MSPs on the expansion process. Being in more than one territory also changes the perceptions of your customers. "If you are a regional player," says Pica, "the list of people who look at you--and how they would value you--is different."
GET YOUR BUSINESS IN ORDER
Before single-location MSPs can even consider branching out, however, they must ensure that they have their businesses in order. This comes down to process: Your sales, marketing, operations, and back-office procedures must be streamlined so that when the time comes to expand, things at the remote location will be consistent with what has already been established at headquarters.
"If we are talking about a company that has a single location, branching outside of that geography means they are going to have remote offices [and] remote employees. They will have to rely on [an established] process to have a seamless expansion of the organization, and to make sure the clients do not see any difference--whether they are from the original location or from a new branch location," explains Charles Weaver, president of industry association MSPAlliance in Chico, Calif.
Pica advises that the first business process to begin with is sales. "They need to be able to add customers every month and scale that," he says. "My experience has been that MSPs really struggle in this area, because they have an owner who learned how to sell, or they have one salesperson who has been there for six years and is able to sell." That's a lot different than having a sales process you can duplicate, he adds.
Much of this relates to consistency, Kilian underlines. "As you grow, you will have more sales conversations with a broader market," he notes. "It's incredibly important that you have a consistent conversation and live up to the expectations that you set."